What Falling Estimates & Price Mean for Newport (NEWP) – Tale of the Tape

Zacks

Similar to wise buying decisions, exiting certain underperformers at the right time helps maximize portfolio returns. Selling off losers can be difficult, but if both the share price and estimates are falling, it could be time to get rid of the security before more losses hit your portfolio.

One such stock that you may want to consider dropping is Newport Corp. (NEWP), which has witnessed a significant price decline in the past four weeks, and it has seen negative earnings estimate revisions for the current quarter and the current year. A Zacks Rank #4 (Sell) further confirms weakness in NEWP.

A key reason for this move has been the negative trend in earnings estimate revisions. For the full year, we have seen 1 estimate moving down in the past 30 days, compared with no upward revision. This trend has caused the consensus estimate to trend lower, going from 29 cents a share a month ago to its current level of 26 cents.

Also, for the current quarter, Newport has seen 1 downward estimate revisions versus no revision in the opposite direction, dragging the consensus estimate down to $1.20 a share from $1.40 over the past 30 days.

The stock also has seen some pretty dismal trading lately, as the share price has dropped 15.7% in the past month.

So it may not be a good decision to keep this stock in your portfolio anymore, at least if you don’t have a long time horizon to wait.

If you are still interested in the Instrument Scientific sector, you may instead consider a better-ranked stock – Mettler-Toledo International Inc. (MTD). The stock currently holds a Zacks Rank #2 (Buy) and may be better selection at this time.

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